PSIX’s CFO presented at the Needham conference in NYC yesterday. A webcast of the presentation can be viewed by going to the PSIX investor relations website. It’s a good overview of their business.
Some key highlights:
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Oil and gas is about 20% of their business.
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Last year sold about 27,000 engines in to oil and gas. There are over 1 million wells in the US so penetration is low.
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Most oil companies rent the engines from rental companies. This means buying the engines are usually not a CapEx line item. If oil companies are looking to reduce expenses they can switch from diesel to NG power generation at the well without incurring a CapEx expense.
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CFO said they should report a strong Q4 when they report on 2/26. Maybe this is why the stock is up 10% today.
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On-road represents a big opportunity. Currently it’s zero revenue and CFO thinks that in a few years it will represent 50% of the company’s revenue.
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China is a big opportunity that’s not tapped yet. They have collaborations and companies are now testing their engines.
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Diesel prices have been slower to decline than oil. Nat gas has decreased too. CFO says the delta between nat gas and diesel is good. The business used to be more expenses than diesel alternative…now they have about a 20% cost advantage over diesel.
I reopened a position today and will likely add if it dips into the low $40s again soon.
Chris